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      04-03-2013, 07:41 AM   #23
InTheNightKitchen
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Quote:
Originally Posted by Lloyd Braun View Post
thats not accurate because you did not account for the amount of interest that would be paid on a lease / financing a new car. plus, assuming a 9% rate of return is pretty ambitious.

also, not all states only tax the residual value of the lease.

agree with the others on this, i guess its worth listening to them, but all they are going to do is have you pay the same amount of money per month with a longer term. unless you want to do this for some reason and need a newer car, i dont understand why you would.
That's all I was going to do, I did mention that I'm good with the numbers when it comes time to talk turkey so to speak. If they attempt to try any BS I walk.

Sidenote - They haven't called me back to discuss anything, if they do I'll report back. If there's no advantage I still have the option of buying my M once off lease too, which I will most likely do!
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      04-03-2013, 11:53 AM   #24
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So what is a reasonable rate of return? 8%? 7%? As far as the pull aheads, yes 3 months is the standard, but they run 6 month specials all the time, just like Porsche is running an 18 month pull ahead right now.

The OP will have to buy or lease another car in the next 12 months. He is not extending the lease on his current vehicle, which would not be a great idea, they are offering a new vehicle. I would be shocked if they offered anything but another 36 month lease.
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      04-04-2013, 03:15 AM   #25
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So what is a reasonable rate of return? 8%? 7%? As far as the pull aheads, yes 3 months is the standard, but they run 6 month specials all the time, just like Porsche is running an 18 month pull ahead right now.

The OP will have to buy or lease another car in the next 12 months. He is not extending the lease on his current vehicle, which would not be a great idea, they are offering a new vehicle. I would be shocked if they offered anything but another 36 month lease.
Point me to *ONE* recent (within 1 year) BMWFS pull ahead program that was for 6 months. The BS meter is through the roof on this one.
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      04-11-2013, 06:09 AM   #26
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If u are looking to get another m3 anyway then it sounds good. As long as there is no money down and your lease payment is comparable to the current rates on the vehicle you are trading into.
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      04-12-2013, 08:09 PM   #27
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The amount of misinformation here is appalling.

BMW as well as other manufacturers have pull forward money to get you out of your lease early. BMW is usually around 6 months and Porsche is running a deal right now for an 18 month pull forward on some models.

The whole idea of a lease is to be in a new car every three years. If you buy a car and then sell it in less than 3 years, you should have leased it. Yes, even if you have to pay to get out of the lease. If you do the financial analysis there is absolutely ZERO DIFFERENCE between buying and leasing over a three year period and many times leasing is financially advantageous if you take into consideration the opportunity cost of capital.

The other consideration is sales tax. In most states the tax is paid on the portion used monthly. Ex $65K purchase price at 8.25% (my local sales tax) is $5362 in sales tax. On a lease with a 61% residual you only pay $2091 in sales tax, plus you get the use of your money over a three year period. Total savings would be over $3K just in sales tax! If you financed your car you are paying interest on that sales tax!

If you paid cash the value of your $70,369 at the end of three years would be over $91K (assuming a 9% investment return) which means you lost $20K+ in investment income.

I understand that people make decisions for different reasons. Some people just like the feeling of "owning" a car. That is an emotional decision and not a financial one. I do not advocate maxing out lease payments at 25% of gross income (this is BMWFS max under the college grad program!), but saying that leasing is stupid or that the dealership is trying to rip him off is idiotic. Unless he wants a different car the real question is why WOULDN'T he re-up the lease? New car for same money before the end of the lease is a great deal for him unless he has a huge amount of equity (which would mean the bank screwed up).

So who here is going to keep their car for 5+ years? My guess is very few, so why didn't you lease?

nice insight, appreciate the perspective
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